NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY
PERSON LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL
TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT OR RELATED
DOCUMENTS.
THIS NOTICE IS IMPORTANT AND REQUIRES THE
IMMEDIATE ATTENTION OF HOLDERS. IF HOLDERS ARE IN ANY DOUBT AS TO THE
ACTION THEY SHOULD TAKE, THEY SHOULD SEEK INDEPENDENT ADVICE,
INCLUDING AS TO ANY LEGAL, FINANCIAL OR TAX CONSEQUENCES, IMMEDIATELY
FROM THEIR OWN BROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER
INDEPENDENT FINANCIAL, TAX OR LEGAL ADVISER.
PJSC "RUSHYDRO"
(“RusHydro”)
NOTICE
to the
holders of
RUB
20,000,000,000 8.125 per cent. Loan Participation Notes due 2022
issued by, but without recourse to, RusHydro Capital Markets DAC (the
“Issuer”) for the sole purpose of financing the loan under the
Loan Agreement (ISIN: XS1691350455, CFI: DYFXXR)
(the
“Notes”)
NOTICE
IS HEREBY GIVEN that RusHydro
is proposing to make direct payments to the holders of the Notes as
set out below. This proposal is aimed at those Noteholders who hold
their Notes in non-Russian depositaries and clearing systems (the
“Non-Russian
Noteholders”).
Payments to Noteholders who hold their Notes via Russian depository
accounts (the “Russian
Noteholders”)
shall be made separately through Russian depositaries in
accordance with applicable mandatory Russian legislation.
To make direct payments to the Non-Russian
Noteholders, RusHydro is required to obtain a Government Commission
Approval (as defined below) and use a type D account opened in
Russian rubles with a Russian bank. To apply for the Government
Commission Approval and open a type D account, RusHydro would first
need to identify such Non-Russian Noteholders who are willing to
receive payments under the Notes via a type D account (the “Electing
Noteholders”). Accordingly, RusHydro hereby asks
the Electing Noteholders to identify themselves and provide certain
information about themselves and the Notes held by them.
For Non-Russian Noteholders who fail to make an
election to receive payments under the Notes via a type D account as
set out herein (the “Non-Electing
Noteholders”), RusHydro will be required to
transfer the amounts due to them to a type C account pursuant to the
Russian President’s Decree No. 95 of 5 march 2022. By law, monies
transferred to a type C account may only be used for a limited number
of purposes (such as the payment of Russian taxes, etc.) and will not
be available for transfer to the Non-Electing Noteholders’ accounts
of other types opened with Russian banks or outside Russia.
Terms used
but not otherwise defined in this Notice have the meanings given to
them in the trust deed dated 28 September 2017 (the "Trust
Deed")
between the Issuer and BNY Mellon Corporate Trustee Services Limited
as trustee (the "Trustee").
Rationale
From February 2022 onwards the United States of
America, the European Union, the United Kingdom and other nations
have imposed additional sanctions against the Russian Federation and
Russian persons in connection with events in Ukraine. The
sanctions, among other things, significantly disrupted the existing
framework and infrastructure for servicing, delivery and settlement
of securities.
On 24 March 2022, RusHydro duly fulfilled its
payment obligations under the Loan Agreement by transferring funds in
the amount of RUB 812,500,000 for subsequent coupon payment. However,
the funds duly received by the Principal Paying Agent were
subsequently frozen because of sanctions introduced by the U.K.
Office of Financial Sanctions Implementation (OFSI) on 24 March 2022
and did not reach the Noteholders. Any funds that RusHydro may
transfer to the Issuer under the Loan Agreement or to the Principal
Paying Agent will presumably be subject to similar freezing before
they reach the Noteholders at maturity of the Notes.
On 9 May 2022, BNY Mellon Corporate Trustee
Services Limited notified the Issuer and RusHydro of its inability to
act as the Trustee in respect of the Notes. On 9 May 2022, TMF
Management (Ireland) Limited resigned as the share trustee to the
Issuer. On 4 July 2022, TMF Administration Services Limited, an Irish
corporate services provider to the Issuer, unilaterally terminated
with immediate effect the corporate services agreement with the
Issuer. As a result, neither the Issuer, nor the Notes infrastructure
established by the Trust Deed are fully functional at this time and
the Noteholders are unlikely to receive any payments that may be made
by RusHydro via said infrastructure pursuant to the Loan Agreement
and the Trust Deed.
Pursuant to the Russian President’s Decree No.
430 of 5 July 2022 and implementing decisions of the Russian Central
Bank entities who have payment obligations in relation to Eurobonds
(such as RusHydro in relation to the Notes) are required to make
payments through Russian depositories to investors who hold such
Eurobonds via Russian depository accounts. Accordingly, in compliance
with this mandatory requirement RusHydro shall pay the Russian
Noteholders through Russian depositaries.
RusHydro is working on a solution that would allow
all the Noteholders, including the Non-Russian Noteholders, to
receive their funds upon maturity of the Notes. The Russian
President’s Decree No. 529 of 8 August 2022 and the Russian Central
Bank’s implementing decision (together the “Type
D Account Regulations”)
allow persons who have payment obligations in relation to Eurobonds
(such as RusHydro in relation to the Notes) to open special type D
accounts in Russian rubles with Russian banks to make payments in
respect of Eurobonds held at non-Russian depositories and clearing
systems.
Pre-Conditions
to direct payment to the Electing Noteholders
Payments under
the Type D Account Regulations are subject to prior approval of the
Russian Government Commission for Control over Foreign Investments in
the Russian Federation (the “Government
Commission”).
RusHydro is proposing to apply for an approval of the Government
Commission of its direct payments to the Electing Noteholders (the
“Government
Commission Approval”)
and to open a type D account in favour of the Electing Noteholders
and to use such account to make payments due to the Electing
Noteholders at maturity of the Notes.
Pursuant to the
Type D Account Regulations, type D accounts are open in favour of
specific recipients. Accordingly, to take advantage of the payment
option allowed by the Type D Account Regulations, RusHydro needs to
identify the Electing Noteholders and receive from them such
information as may be required by (i) the Government Commission to
issue the Government Commission Approval and (ii) a Russian bank (the
“Bank”)
selected by RusHydro to carry out the settlements with the Electing
Noteholders.
The approval by RusHydro of the relevant funds
transfer to an Electing Noteholder is conditional upon receipt of the
originals of the Election Documents on behalf of such Electing
Noteholder as set out in section “Noteholder to make a direct
payment election” below.
Risk factors
The Type D Account Regulations are new and
untested legislation. They are worded in general terms and give
little or no guidance on important specific questions, including,
without limitation, as to (i) the timing and procedure for obtaining
the Government Commission Approval and (ii) the exact scope of
identifying information and documents that may be required by the
Bank to carry out the payments to the Non-Russian Noteholders. In
response to RusHydro’s request for clarifications, the Russian
Central Bank has indicated to RusHydro that Russian banks have
discretion in determining the scope of identifying information and
documents they require to process payments to investors from type D
accounts.
The implementation of the proposed direct
settlement with the Electing Noteholders involves discretion, and
requires consent and cooperation, of third parties over which
RusHydro has no control, including without limitation the Government
Commission and the Bank. Delays on the part of the Government
Commission or its failure to issue the Government Commission Approval
or delays or failure by the Bank to transfer the payments may result
in the direct payment arrangement not achieving the desired result in
full or in part. Although RusHydro would take reasonable steps to
ensure that the proposed direct settlements are completed and the
relevant amounts are transferred to the Electing Noteholders as soon
as reasonably possible, no assurance can be given that this will be
achievable.
Similarly, given the existing complex
international sanctions regimes, no assurance can be given that the
Electing Noteholders’ banks will accept payments from the Bank and
make the transferred funds available to the respective Electing
Noteholders.
Noteholder
to make a direct payment election
To elect to receive the monies due to a Noteholder
at maturity of the Notes directly from RusHydro in accordance with
the Type D Account Regulations (“Direct
Payment Election”), an Electing Noteholder should
deliver, or arrange to have delivered on its behalf, to RusHydro
scans of the following documents:
(i) proof of holding of
the Notes (as set out below);
(ii) a valid completed
and duly executed Direct Payment Election Notice;
(iii) a duly executed deed
of assignment and waiver; and
(iv) a valid completed and duly
executed Notice of Assignment and Waiver
by no later than 10:00 a.m. (London time) / 12:00
noon (Moscow time) on 3 October 2022, to the attention of the
Corporate Finance Department at the following email address:
,
.
Acceptable proof of holding referred to under item
(i) above are documents allowing to clearly identify the end-holder
of specific Notes, including (i) statements of account from Direct
Participants (as defined below), screenshots from Euroclear or
Clearstream, Luxembourg identifying the relevant person as a Direct
Participant and identifying the Notes held by them, along with
evidence indicating in whose favour the Notes are held by the
relevant Direct Participant and (ii) evidence that the Notes are held
by a particular end-holder through an Intermediary or Intermediaries
(in each case including the amount of the Notes held and the names
and account numbers of the relevant end-holders and Intermediary or
Intermediaries along the entire holding chain from the relevant
end-Noteholder to the relevant Direct Participant). A “Direct
Participant” means a person that is shown in the records
of the clearing and settlement systems of Euroclear or Clearstream,
Luxembourg as a holder of Notes. An “Intermediary”
means a depositary, broker, dealer, commercial bank, trust or asset
management company or other nominee or custodian that holds any
Notes.
Documents listed under items (ii) through (iv)
above shall together be referred to as the “Election
Documents”. Forms of the Election Documents are
available upon request sent to the following email address:
.
Originals of the Election Documents shall be
delivered by hand or sent by an internationally recognized courier
service to the following addresses:
PJSC “RusHydro”
7 Malaya Dmitrovka Street
Moscow 127006
Russian Federation
Attention: Corporate Finance Department
or
JSC «Institute Hydroproject», Branch in the
Kyrgyz Republic
Office 1105, Business Centre “Russia”
19 Razzakova Street
Bishkek 720040
Kyrgyz Republic
Attention: PJSC “RusHydro” (Corporate Finance
Department)
The approval by RusHydro of the relevant funds
transfer to an Electing Noteholder is conditional on receipt of the
Election Documents on behalf of such Electing Noteholder at the
addresses stated above.
RusHydro reserves the right to request further
information and documents from the Electing Noteholders if such
information and documents are required by the Government Commission
or the Bank.
Only Noteholders who hold the Notes as of 27
September 2022 may submit a Direct Payment Election Notice.
As part of proposed direct redemption and
settlement arrangements and subject to the Type D Account Regulations
or other applicable laws, the Electing Noteholders shall be able to
select receiving payments in Russian rubles, United States dollars or
other foreign currency. Any and all currency conversion, exchange,
transfer or other bank fees (including fees charged by any
intermediary or correspondent banks) in connection with the transfer
of the relevant funds to the Electing Noteholders’ accounts shall
be borne by the Electing Noteholders and not RusHydro. The selection
of currency other than Russian rubles or U.S. dollars may be subject
to the discretion of, and special arrangements with, the Bank.
Direct
Payment Election Notice irrevocable
Direct Payment Election Notices will be
irrevocable.
Responsibility
to consult advisers
Each Noteholder is solely responsible for making
its own independent appraisal of all matters as such Noteholder deems
appropriate in connection with this Notice and the proposed direct
redemption and settlement arrangements, and each Noteholder must make
its own decision as to whether to make the Direct Payment Election.
None of RusHydro or its respective directors,
officers, employees, affiliates, advisers or agents makes any
recommendation as to whether Noteholders should consent to the
proposed direct redemption and settlement arrangements, or refrain
from taking any action in relation to same with respect to their
Notes, and none of them has authorised any person to make any such
recommendation.
Noteholders should consult their own tax,
accounting, financial and legal advisers regarding the suitability to
themselves of the tax, accounting, financial and/or legal
consequences of consenting to the proposed direct redemption and
settlement arrangements and making the Direct Payment Election. None
of RusHydro or its respective directors, officers, employees,
affiliates, advisers or agents has made or will make any assessment
of the merits of the proposed direct redemption and settlement
arrangements or of the impact of the Direct Payment Election on the
interests of Noteholders either as a class or as individuals.
Noteholders are liable for their own taxes and have no recourse to
RusHydro with respect to taxes arising in connection with the
proposed direct redemption and settlement arrangements.
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